The opinion of the court was delivered by: Judge Sylvia H. Rambo
Presently before the court is Plaintiff's motion for leave to amend its complaint to dismiss claims under breach of contract. (Doc 76.) The motion has been briefed and is ripe for disposition. For the reasons that follow, the court will grant the motion.
This case involves a subrogation claim filed by Community Association Underwriters of America, Inc. ("CAUA"), wherein CAUA seeks to recover payments made to Park View at Waverly Condominiums ("Park View") as a result of a fire that occurred on March 4, 2008. Plaintiff seeks recovery based on claims of negligence and breach of contract.*fn1 Presently before the court are several summary judgment motions that are ripe for disposition. Defendants filed two separate but nearly identical motions seeking summary judgment on the ground of spoliation of evidence in connection with alleged tampering with the fire scene during the demolition process. (Docs. 43, 50.) Defendants also filed a joint motion for summary judgment claiming that Plaintiff's expert's report is deficient because it fails to state the basis for the expert's opinion as required under Federal Rule of Civil Procedure 26 (a)(2)(B). (Doc. 45.)
On January 31, 2011, the court granted the parties' joint motion for an extension of the dispositive motion deadline. On February 14, 2011, Defendants filed a joint motion for summary judgment based on a waiver of subrogation clause contained in an "AIA" contract ("construction contract") between Waverly Woods Associates ("Waverly Woods"), the original owner and developer of the condominium complex, and Defendant R & L Construction Company ("R&L"). (Doc. 67.) That motion is also ripe for disposition.
In Defendants' motion for summary judgment based upon waiver of subrogation, Defendants assert that Park View is a third-party beneficiary of the construction contract and thus "is entitled to the rights and subject to the defenses contained in the contract." (Doc. 67, ¶ 13.) In support of this argument, Defendants rely on Plaintiff's assertions in the complaint stating that Park View is a third-party beneficiary of the construction contract between Waverly Woods and R&L, of the subcontract between R&L and Adams, and of the sub-subcontracts between Adams and Alan Barb and Pedro Quintero. (Doc.67, ¶ 10.)
In its motion for leave to amend its complaint, Plaintiff seeks to withdraw the breach of contract claim and proceed only on the negligence claim. Plaintiff also intends to delete any language claiming that Park View is a third-party beneficiary to any agreement between any other parties or non-parties to this action. For the reasons that follow, the court will grant the motion and permit Plaintiff to amend its complaint accordingly.
Once a responsive pleading has been served, "a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). Whether to grant or deny the motion is within the district court's discretion. Foman v. Davis, 371 U.S. 178, 182 (1962). A court may deny a motion for leave to amend if "(1) the moving party has demonstrated undue delay, bad faith or dilatory motives, (2) the amendment would be futile, or (3) the amendment would prejudice the other party." Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107, 116 (3d Cir. 2003). Mere delay will not warrant the denial of a motion for leave to amend "absent a concomitant showing of undue prejudice or bad faith." Zygmuntowicz v. Hospitality Invs., Inc., 151 F.R.D. 53, 55 (E.D. Pa. 1993).
Prejudice has been defined as "undue difficulty in prosecuting a position as a result of a change in tactics or theories." Id. "Amendment of the complaint is futile if the amendment would not cure the deficiency in the original complaint or if the amended complaint cannot withstand a motion to dismiss." Massarsky v. General Motors Corp., 706 F.2d 111, 125 (3d Cir. 1983).
In sum, in considering a motion for leave to amend, the court must weigh the prejudice to the non-moving party against the harm to the movant if leave is not granted. 3 James Wm. Moore et al., Moore's Federal Practice § 15.15. The court should also consider judicial economy and the impact an amendment to the complaint would have on the court's management of the case. Id.
In its brief in support of its motion for leave to amend, Plaintiff concedes that Waverly Woods, the original owner of the condominium complex, entered into a standard AIA contract with R&L to build several condominiums and that the contract incorporates by reference general conditions including a waiver of subrogation clause that is applicable to Waverly Woods. (Doc. 77 at 2.) However, Plaintiff notes that on May 24, 2007, Waverly Woods signed a Declaration of Condominium that created the present subrogor, Park View, and transferred the property to this new entity.*fn2 (Id.) Accordingly, Plaintiff argues that Waverly Woods has never been insured by CAUA and further notes that Waverly Woods is not a party to this suit. (Id.) Plaintiff asserts that Park View was not even in possession of the construction contract until it was produced during discovery. (Id.) In short, Plaintiff seeks to withdraw its breach of contract claims arguing, in essence, that the contract is only applicable between Defendants and a non-party, Waverly Woods, and does not implicate either CAUA or Park View.
Defendant Quintero filed a brief in opposition to Plaintiff's motion for leave to amend.*fn3 Defendant Quintero believes that Plaintiff, by amending the complaint in such a manner, is merely trying to distance itself from the construction contract, thus making irrelevant the waiver of subrogation clause that forms the basis of the ...